Margin requirement

Margin requirement

A performance bond paid upon purchase of a futures contract that protects the exchange clearinghouse from loss.

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margin requirement

See initial margin requirement, maintenance margin requirement, option margin.

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Margin requirement. The margin requirement is the minimum amount the Federal Reserve, in Regulation T, requires you to deposit in a margin account before you can trade through that account.

Currently this minimum, or initial margin, is $2,000, or 50% of the purchase price of securities you buy on margin, or 50% of the amount that you receive for selling securities short.

In addition, there's a minimum maintenance requirement, a minimum of 25% and often more, of the market value of the securities in the account. The maintenance requirement is set by the New York Stock Exchange (NYSE), NASD, and the individual brokerage firms.